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Thursday, April 13, 2017

Bad news on the wages front

Inflation outstripped pay growth in February. Rising prices and stagnant wage growth have resulted in the first fall in living standards in two and a half years, according to official figures.

Labour market data from the Office for National Statistics showed that regular pay in the UK in February was 1.9% higher than a year earlier and is running below the 2.3% increase in prices.

Economists expect the squeeze on real inflation-adjusted wages to intensify over the coming months as the weak pound affects the cost of living.

Frances O’Grady, the TUC general secretary, said: “Pay packets are taking a hammering from rising inflation and falling wage growth. We now need urgent action to stop another living standards crisis."

The GMB union described the figures as “disturbing”.

The Resolution Foundation said 40% of the workforce were affected by falling real wages. Stephen Clarke, an economist at the thinktank, said: “Britain’s brief pay recovery has come to an end; 40% of the workforce are experiencing shrinking pay packets, according to the latest figures, in sectors ranging from accommodation to finance and the public sector. Many more will join them in the coming months as inflation continues to rise."